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Rabo Agrifinance, LLC v. Sills

Court of Appeals of North Carolina

April 2, 2019

RABO AGRIFINANCE, LLC FKA RABO AGRIFINANCE, INC., Plaintiff-Judgment Creditor,
v.
ANGELA SILLS, Defendant-Judgment Debtor.

          Heard in the Court of Appeals 30 January 2019.

          Appeal by plaintiff from order entered 24 April 2018 by Judge Mark E. Klass in Harnett County No. 16 CVS 2096 Superior Court.

          Womble Bond Dickinson (US) LLP, by Michael Montecalvo, for plaintiff-appellant.

          No appellee brief filed.

          DIETZ, JUDGE.

         Angela Sills, a farmer in Sampson County, applied for a loan from Rabo Agrifinance, LLC, an Iowa company that offers financing to farmers and other agricultural businesses. The loan contract included a clause providing that Sills consented to personal jurisdiction in the Iowa courts.

         Sills later defaulted on the loan and Rabo obtained a default judgment against Sills in an Iowa state court. When Rabo sought to enforce that judgment in North Carolina, Sills sought relief from the judgment under Rule 60(b)(4), arguing that the Iowa court did not have personal jurisdiction over her. The trial court agreed and granted relief from the Iowa judgment.

         As explained below, we reverse the trial court's order. The parties' contract is governed by Iowa law and the consent to jurisdiction clause is valid under Iowa law. Accordingly, the Iowa court properly exercised jurisdiction over Sills and the judgment is enforceable in our State courts.

         Facts and Procedural History

         On 17 December 2007, Angela Sills, a resident of Sampson County, entered into an account agreement with Rabo Agrifinance, LLC, an Iowa business, to secure financing for a farming operation. The agreement contained a clause stating that Sills "knowingly and voluntarily consent[s] to be subject to the jurisdiction in the State of Iowa for purposes of adjudicating any rights and liabilities of the parties." After Sills defaulted on the loan, Rabo obtained a default judgment of $61, 113.78 plus interest from a state trial court in Iowa.

         Rabo then sought to enforce the Iowa judgment against Sills in North Carolina. Sills moved for relief from the Iowa judgment, asserting that the judgment should be set aside because she had never been in Iowa, had no contacts with Iowa, and was unaware of the consent to jurisdiction clause in the contract. After a hearing, the trial court granted Sills's motion for relief from the judgment under Rule 60(b)(4) based on lack of personal jurisdiction. Rabo timely appealed.

         Analysis

         This case is governed by the Uniform Enforcement of Foreign Judgments Act, which addresses recognition and enforcement of other states' judgments in the North Carolina court system. N.C. Gen. Stat. §§ 1C-1701-1C-1708. The Act provides that a judgment debtor may seek relief from a foreign judgment on any ground "for which relief from a judgment of this State would be allowed." N.C. Gen. Stat. § 1C-1705(a). Although this language is broad, it is limited by the Full Faith and Credit Clause of the United States Constitution. As our Supreme Court has explained, "the defenses preserved under North Carolina's UEFJA are limited by the Full Faith and Credit Clause to those defenses which are directed to the validity and enforcement of a foreign judgment . . . such as. . . that the rendering state lacked personal or subject matter jurisdiction." DOCRX, Inc. v. EMI Servs. of North Carolina, LLC, 367 N.C. 371, 382, 758 S.E.2d 390, 397 (2014).

         Here, the trial court granted relief from the judgment after concluding that the Iowa court lacked personal jurisdiction over Sills. The trial court's order is focused primarily on Sills's contacts with the State of Iowa but we need not address that question because, on appeal, Rabo does not dispute Sills's lack of contact with Iowa generally. Instead, Rabo focuses on the fact that the parties entered into the ...


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